What is the present value factor for an annuity of five periods and an interest rate of 10 percent? a. 1.6105
b. 6.1051
c. 3.7908
d. 7.7217

The correct answer is choice c - 3.7908

Explanation: The formula to calculate the annuity present value factor is:

(1-(1+r) ^-n ) / rate

Using the information from the problem, r equals the rate, which is .1 and n equals the number of periods, which is 5.

Now, putting the information into the formula:

(1 - (1 + .1) ^-5) / .1 = Present value annuity factor

3.7908 = Present value annuity factor

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